13D Weekly Report - Feb 12, 2024 to Feb 16, 2024
$SYBX, $CRGE, $PLCE, $JBLU, $SHLT, $BFIN, $LFVN, $ACTG, $SFBC, $B, $FREE
Table of contents
Funicular Funds Supports for Strategic Review at Synlogic, Inc (SYBX)
Carl Icahn, Jesse Lynn, and Steven Miller reach agreement with JetBlue Airways Corporation (JBLU)
Value Base and Danbar Finance Ltd secured a Board seat in SHL Telemedicine Ltd (SHLT)
Strategic Value Investors secured a board seat in BankFinancial Corporation (BFIN)
Radoff-Sudbury Group reached agreement with LifeVantage Corporation (LFVN)
Starboard Value secured a Board seat in Acacia Research Corporation (ACTG)
Sound Financial Bancorp (SFBC) Unveils Director Nominees, Including Stilwell's Representative
INITIATED
Funicular Funds Supports for Strategic Review at Synlogic, Inc (SYBX)
Key Summary: Funicular Funds applauds the Board's prompt response. They aim to contribute to the strategic review process.
Market Cap: $17 million| Synlogic, Inc., a clinical-stage biopharmaceutical company, engages in the discovery and development of synthetic biotics to treat metabolic and immunological diseases in the United States.
On February 16, 2024, Funicular Funds (36%) extends condolences for a clinical setback and applauds the Board's prompt response. They aim to contribute to the strategic review process. Source
Kenneth Orr Requests Records Inspection at Charge Enterprises (CRGE) Amid Allegations of Mismanagement and Conflicts
Key Summary: Arena Investors (10%) urges board improvement due to a 78% stock decline. They recommend specific actions for value enhancement, criticizing the board's lack of response to engagement efforts. Kenneth Orr (9.5%) demands records inspection to probe potential misconduct, focusing on disputes, telecom operations, and governance concerns.
Market Cap: $19 million| Charge Enterprises Inc. operates as an electrical, broadband, and electric vehicle (EV) charging infrastructure company.
Background
On August 21, 2023, Arena Investors (10%) sent a letter to the Board urging them to improve management and operations due to a 78% stock decline in a year. Arena believes better leadership can drive profits, growth, and electric vehicle charging expansion. However, Arena criticized the current board for not responding to six months of private engagement, impeding crucial performance improvements.
On September 11, 2023, Arena Investors (10%) sent a letter to the Board expressing concerns about the underperformance of the stock and urged the board to take specific actions to enhance the company's value for shareholders. Arena's key recommendations and concerns include: (i) Elimination of a Staggered Board Structure, (ii) Reinvigoration of the Board, (iii) Changes in Management/Operations, (iv) Engaging a Professional Interim Advisor, (v) Integration and Incentivization of Subsidiaries, (vi) Revisiting General and Administrative Costs, and (vii) Rationalize Cost of Capital. In conclusion, Arena expressed its commitment to Charge's long-term potential but insisted on immediate and comprehensive actions to improve the company's performance and value for shareholders.
Update
On February 13, 2024, Kenneth Orr (9.5%) submitted a demand letter to inspect books and records. The request aims to investigate potential wrongdoing, mismanagement, conflicts of interest, corporate waste, and breaches of fiduciary duties by certain members of the management team and Board of Directors. Key areas of focus include disputes with Arena Investors LP over debt agreements, allegations related to the company's telecom business operations, and concerns about potentially conflicted and self-interested management. Source
Mithaq Capital SPC/Snowball Compounding Ltd nominated eleven new board candidates to The Children's Place Inc (PLCE)
Key Summary: Mithaq Capital SPC/Snowball Compounding Ltd, owning 54% of the company, has nominated eleven new board candidates.
Market Cap: $363 million | The Children's Place Inc. is an American specialty retailer of children's apparel and accessories headquartered in Secaucus, New Jersey.
On February 14, 2024, Mithaq Capital SPC/ Snowball Compounding Ltd, with a 54% stake in the company has nominated eleven new candidates for the board of directors. They seek a meeting with the current board to discuss governance transition and financing for liquidity needs. Source
Past
In April 2015, Macellum and Barington Companies Equity Partners (together 2.1%) formed "Shareholders for Change at The Children’s Place" and sent a letter to shareholders, aiming to elect two board candidates and explore sale opportunities. In May 2015, the company reached an agreement with Macellum and Barington, resulting in one candidate from their group joining the board.
BOARD SEAT/ AGM RESULTS
Carl Icahn, Jesse Lynn, and Steven Miller reach agreement with JetBlue Airways Corporation (JBLU)
Key Summary: Carl Icahn, Jesse Lynn, and Steven Miller reach agreement on board nomination and appointment with the company.
Market Cap: $2.4 billion | JetBlue Airways Corporation provides air transportation services.
On February 16, 2024, Carl Icahn and Messrs. Jesse Lynn and Steven Miller entered into a Director Appointment and Nomination Agreement with the company. Pursuant to the agreement, the company will include Messrs. Lynn and Miller, nominated by Carl Icahn, as observers on the Board of Directors. Following the 2024 annual meeting of stockholders, these nominees will be formally appointed to the Board. Source
Value Base and Danbar Finance Ltd secured a Board seat in SHL Telemedicine Ltd (SHLT)
Key Summary: On Dec 14, 2023, Value Base (8.6%) proposed Mr. Nouberger for the Board. On Dec 26, 2023, Danbar Finance nominated Nir Rotenberg. On Feb 8, 2024, Mr. Nouberger and Mr. Rotenberg were elected to the Board.
Market Cap: $93 million | SHL Telemedicine Ltd., together with its subsidiaries, develops and markets personal telemedicine solutions in Israel, Europe, and internationally.
Background
On December 14, 2023, Value Base (8.6%) sent a letter to the Board proposing Mr. Nouberger as a candidate for election to the Board for the upcoming AGM. Source
On December 26, 2023, Danbar Finance Ltd. stated that on December 6, 2023, that it wrote to SHL Telemedicine Ltd. to request that Nir Rotenberg be appointed to the board and that such proposal will be included on the agenda for the next annual general shareholders meeting of the Company. Danbar Finance added that if elected, Nir Rotenberg intends to engage in communications with the board of directors and management of the Company regarding opportunities to enhance shareholder value.
Update
At the AGM held on February 8, 2024, Mr. Nouberger and Mr. Rotenberg were elected to serve on the board. Source
Strategic Value Investors secured a board seat in BankFinancial Corporation (BFIN)
Key Summary: Strategic Value Investors entered into a standstill agreement with the company and secured a board seat.
Market Cap: $126 million | BankFinancial Corporation operates as the bank holding company for BankFinancial, National Association that provides various commercial, family, and personal banking products and services.
On February 7, 2024, Mr. Mackovak was appointed to the Board. In connection with Mr. Mackovak’s appointment, Strategic Value Investors entered into a standstill agreement with the company on February 7, 2024.
Radoff-Sudbury Group reached agreement with LifeVantage Corporation (LFVN)
Key Summary: The Radoff-Sudbury Group advocated for board changes at LifeVantage. Despite support from ISS and Glass Lewis, their nominees weren't elected at the 2023 AGM. Eventually, on Feb 14, 2024, a Cooperation Agreement was reached, expanding the board and appointing Dayton Judd. The Group Agreement between Radoff and Sudbury was terminated.
Market Cap: $83 million | LifeVantage Corporation engages in the identification, research, development, formulation, sale, and distribution of nutrigenomic activators, dietary supplements, nootropics, pre- and pro-biotics, weight management, skin and hair care products, bath and body, and targeted relief products.
Background
On May 15, 2023, Bradley L. Radoff (5.7%) stated his belief that the company's current share price materially undervalues the business and was encouraged by the most recent operating results. He also stated that the company would benefit from an enhanced board of directors that would, among other things, bring a stockholder’s perspective to the boardroom, hold management accountable to a double-digit EBITDA margin and implement a consistent and value-enhancing capital allocation framework. Source
On August 9, 2023, Mr. Radoff delivered a letter to the company nominating Dayton Judd, Michael Lohner and Bradley L. Radoff for election to the Board at the 2024 AGM.
On September 26, 2023, Mr. Radoff filed proxy materials seeking support for his nominees.
On October 12, 2023, the Radoff-Sudbury Group (12.8%) (Bradley L. Radoff & Sudbury Capital Fund, LP) issued an Investor Presentation titled “The Case for Boardroom Change at LifeVantage” detailing why they believe that LifeVantage is in urgent need of new perspectives in the boardroom following years of poor performance and governance under long-tenured directors Chairman Garry Mauro, Michael Beindorff and Darwin Lewis.
On October 25, 2023, the Radoff-Sudbury Group (12.8%) criticized the Board for alleged deceptive tactics, including a questionable endorsement letter. They suspect a consultant, Tyler Daniels, has undisclosed ties and may have been compensated for the letter. The Group plans to address undisclosed conflicts with the Board and calls for clarity on Daniels' compensation, emphasizing the need for change in the Board due to governance issues and stockholder losses. Source
On October 26, 2023, the Radoff-Sudbury Group announced that ISS has recommended stockholders support boardroom change by voting on the Radoff-Sudbury Group’s BLUE Proxy Card. In particular, ISS recommended stockholders elect independent director candidate Dayton Judd and withhold support for long-tenured Chairman Garry Mauro at the Company’s upcoming AGM.
On October 30, 2023, Glass, Lewis & Co., LLC has joined ISS in recommending that the stockholders support boardroom change by voting on the Radoff-Sudbury Group’s BLUE Proxy Card. Specifically, Glass Lewis recommended that stockholders elect independent director candidate Dayton Judd and withhold support for long-tenured director Michael Beindorff at the Company’s upcoming AGM. Source
On November 2, 2023, Mr. Radoff filed proxy materials seeking support for his nominees.
At the AGM held on November 6, 2023, the Radoff-Sudbury Group nominees were not elected to the Board.
On November 10, 2023, the Radoff-Sudbury Group determined to continue to work together in order to enhance stockholder value, improve corporate governance, and take other actions related to their investment in the company. Source
Update
On February 14, 2024, the Radoff-Sudbury Group (12.5%) entered into a Cooperation Agreement with the company and pursuant to it, the company increased the size of the Board and appointed Dayton Judd to the Board. In connection with the entry into the Cooperation Agreement, Mr. Radoff and Sudbury terminated the Group Agreement.
Starboard Value secured a Board seat in Acacia Research Corporation (ACTG)
Key Summary: Sidus Investment Management and BLR Partners (4.6%) sought board seats at Acacia, echoing governance and value concerns. Glass Lewis and ISS endorsed their candidates. Shareholders strongly backed them at the 2018 Annual Meeting. On February 13, 2024, Ajay Sundar of Starboard Value LP (61.2%) joined as a director, while Jonathan Sagal resigned.
Market Cap: $434 million | Acacia Research Corporation by partnering with patent owners, invests in, develops, licenses, and enforces patented technologies in the United States.
On February 13, 2024, Ajay Sundar, Managing Director at Starboard Value LP (61.2%), was appointed as a director of the company to serve until the 2024 annual meeting of stockholders and until his successor is duly elected and qualified. In addition, Jonathan Sagal (Partner at Starboard ) resigned as a director of the company, effective February 13, 2024. Source
Past
Sidus Investment Management and BLR Partners (4.6%) sought board representation at Acacia. They highlighted concerns about governance, leadership, and value destruction. Glass Lewis and ISS recommended their nominees. Ultimately, shareholders overwhelmingly supported their candidates at the 2018 Annual Meeting.
Sound Financial Bancorp (SFBC) Unveils Director Nominees, Including Stilwell's Representative
Key Summary: Joseph Stilwell sought board representation to maximize shareholder value. On February 14, 2024, his nominee was announced as director nominees for election at the Annual Meeting.
Market Cap: $100 million | Sound Financial Bancorp, Inc. operates as the bank holding company for Sound Community Bank that provides banking and other financial services for consumers and businesses.
Background
On May 12, 2023, Joseph Stilwell (13.1%) sought board representation stating that he do not believe the value of the company' assets is adequately reflected in the current market price of the common stock. Source
On August 1, 2023, Joseph Stilwell (14.3%) reiterated that he sought board representation and support maximizing shareholder value at the company. Source
On November 3, 2023, Joseph Stilwell (15.4%) reiterated that he sought board representation and support maximizing shareholder value at the company
Update
On February 14, 2024, the company announced its director nominees for election at the Annual Meeting in its Form 8-K, which nominees include Ms. Porcelli (Stilwell's nominee). Source
ONGOING
Irenic Encourages Barnes Group (B) to Move with Greater Urgency to Collaborate on Necessary Board Improvements
Key Summary: On January 29, 2024, Irenic Capital (5.1%) nominated director candidates
Market Cap: $1.8 billion | Barnes Group Inc. provides engineered products, industrial technologies, and solutions in the United States and internationally.
Background
On January 29, 2024, Irenic Capital (5.1%) nominated two candidates for election to the Board at the 2024 AGM. Source
Update
On February 16, 2024, Irenic Capital Management (5.1%) filed proxy materials urging for a more engaged, independent Board following disappointing Q4 and full-year 2023 results. They advocated for adding independent directors with industry and capital expertise to benefit Barnes' shareholders. Source
Whole Earth Brands (FREE) Signs Definitive Agreement to be Acquired by Affiliates of Sababa Holdings FREE, LLC
Key Summary: On Jan 3, 2024, they urged an immediate sale due to poor performance, high debt ($411M), and missed forecasts at Whole Earth. On Feb 13, 2024, the company entered into a definitive agreement to be acquired by an affiliate of Sababa Holdings FREE, LLC for $4.875 per share.
Market Cap: $203 million | Whole Earth Brands, Inc. operates as a food company worldwide. It operates through two segments, Branded CPG and Flavors & Ingredients.
Background
On December 29, 2023, Notch View Capital Management (5.9%) stated that it plans to discuss ways to enhance shareholder value with the management and board of directors. Source
On January 3, 2024, Notch View Capital (5.9%) sent a letter to the Board expressing concern about the company's performance and the delayed response to a June 2023 acquisition offer, advocating for an immediate sale due to financial underperformance and rising debt. Despite $300 million in acquisitions, Whole Earth significantly missed its 2023 adjusted EBITDA forecast by over 33%. Profitability fell short, with debt rising due to acquisitions, having reached over $411 million in net debt by September 2023, at 5.4x adjusted EBITDA. Notch View deemed that leverage level unacceptable and saw a target of below 3.0x as achievable by 2027.
Update
On February 13, 2024, the company entered into a definitive agreement to be acquired by an affiliate of Sababa Holdings FREE, LLC for $4.875 per share.
On February 14, 2024, Notch View Capital sold its entire stake in the company.